Bank of England: In recent months, a large amount of gold has been extracted from the Bank of England (BOE). Investors are concerned that US President Donald Trump may impose duty on gold imports. To avoid this, traders have already started sending New York gold from London. But this shipping process is going on very slow, due to which gold supply is being affected and prices are increasing. But the main question here arises that why is this process so slow? Now the question is arising whether the person who had kept his gold safe, has no so much gold that he can return it?
There are many questions, but its impact is visible on the global markets. Increase in gold prices can affect countries like India, as India is the second largest buyer of gold in the world. If the availability of gold in London decreases, India may have to buy gold at high prices.
Know the whole story.
Bank of England is one of the world’s largest gold protectors. There has been an unusual decline in gold reserves in the last few months. According to a report, thousands of gold rods have been extracted from BOE’s chests.
Traders are sending New York gold from London. This has allegedly created logistic problems, and the time to extract gold has increased from a few days to several weeks. This situation has also reduced the 400-tro-oux bar, which is standard in London, as these times are melted and molded to meet the needs of New York.
Why is this happening?
This bounce in withdrawal is due to the speculation that the Trump administration can impose tariffs on gold imports in future, which will make the transportation of gold to another (especially in America) to another. To avoid these possible costs, market participants, especially bullion banks and hedge funds, are transferred to New York.
Some important questions and answers on this issue
Question: What is the Bank of England gold controversy?
Answer: By March 17, 2025, Bloomberg reported that the Bank of England, which stores more than 400,000 gold rods (about 5,000 MT), is under investigation of the causes of delay in extracting gold from their chests. Bloomberg reported that the waiting period has increased to eight weeks, which is much more than normal, which raises questions on management and even the actual existence of its gold reserves. Let us tell you that the Bank of America collects gold for the UK government, foreign banks and its commercial customers.
Question: Why is this delay now?
Answer: According to a report, there has been an increase in requests to withdraw gold at the end of 2024 due to the threat of tariff under President Donald Trump and the price difference between the markets of London and New York. The Financial Times said that the bank has stated one reason for the delay. He said that the physical form of gold requires safe transportation and coordination with companies such as brinks, which are highly busy.
Question: Does the bank not have enough gold? Is there any proof?
No such concrete evidence has been found yet, but it is discussed. According to the bank’s website, gold is preserved in the name of specific owners. Bank of England Governor Andrew Bailey said in early 2025 that only 2% of the bank’s total gold has been transferred recently. However, financial expert Peter Shif said in a podcast in March 2025 that banks could lease their gold or adopt a certain reserve system, which may reduce its availability.
Question: Has this happened before?
Answer: Yes, such cases have also come up earlier. According to a 2022 report, Venezuela took several years to get their gold back from the bank and it was possible only after diplomatic pressure. Germany also revealed in 2017 that it took it about 10 years to bring back its gold from foreign chests including London.
Question: What is the bank saying about this?
Answer: Bank of England Governor Andrew Bailey said that London will play an important role in the world’s $ 10 trillion dollars (about 830 lakh crore rupees) in 2025 and recent changes will have only 2% of its total stock. The official statement of the bank said that any delay is due to safety and shipping issues, not due to lack of gold.
Question: What can be the effect on the global gold market?
Bloomberg reported in March 2025 that the market has affected liquidity due to low gold availability in London. According to S&P Global, if trust in London is weak, investors can turn to other centers such as Dubai, or the country can focus on keeping their gold safe.
Question: What will be the effect on India?
Answer: India is the second largest consumer of gold in the world. India will import 800 tonnes of gold in 2024. Financial experts believe that if there is a problem in the availability of gold in London, India may have to depend on imports from markets like Dubai, which may increase the cost. The Reserve Bank of India has 800 tonnes of gold reserves, of which 100 tonnes have been kept in Bank of England. In 2024, 100 tonnes of gold was brought back, which experts have linked to geopolitical risks.
Question: Will this affect the global demand for gold?
According to S&P Global, countries like Russia and Türkiye can strengthen their regional gold markets given this situation. According to a report by Bloomberg, weakening of the rupee can lead to fluctuations in gold prices, which can affect India’s economy, as the cultural and economic importance of gold here is very high.
